David Shemano wrote: > In fact, are you telling me as a historical matter that the Soviet > Union and other socialist economies did not and do not suffer from any > Subsidized Moral Hazard problems?
Charles Brown wrote: > CB: Yes, socialist consider what you are talking about as moral success > of socialism: no unemployment, no poverty, free rent, free health care, > free child care, free workers' vacation resorts, free college. That's > all considered success , not hazard by socialists. Moral hazard is a > bourgeois concept. I'd amend that to say that _pro-Soviet_ socialists "consider what you are talking about as moral success of [Soviet-style] socialism." Charles does not speak for all socialists -- nor do I. I haven't been paying attention to this pen-l debate, but I don't consider "moral hazard" to be a bourgeois concept, though (as usually stated) it presumes some sort of market economy. The concept has be used carefully, to take into account the institutional specifics. It might be said (though some would quibble about definitions) that the impact of the absence of unemployment in the old USSR could be explained in terms of moral hazard. But instead use simpler terms: as Marx pointed out, under wage labor, some sort of reserve army of unemployed is needed to motivate people to work. [We're not talking about white-collar professionals here, but production workers.] The relative ease of getting and keeping a job in the old USSR was an important part of the very-common saying back then that "we pretend to work and they [the government] pretends to pay us." The benefits of "no poverty, free rent, free health care, free child care, free workers' vacation resorts, free college" were "moral successes," as Charles points out, to the extent that they were realized in practice. The trouble is that it took away the whip of hunger -- or the fear of bankruptcy and spinning into the vicious circle of poverty -- that motivates workers to labor under capitalism (especially at the lower levels of the class system) and under other economic systems where workers lack other reasons to work hard. [At higher levels of the class system, the fear is not that of falling into poverty as much as falling down the hierarchy.] Another thing that undermined the incentive to work was the "they pretend to pay us" clause: the money paid to workers -- often using piece-rates and other incentives of the sort that capitalists also use -- was often worthless, because there were not enough products on the shelf to buy. (That's why there was a lot of hoarding of money under the old USSR at its peak: there wasn't enough to spend it on and prices weren't allowed to inflate.) People also spent much too much time waiting in line trying to get products. As I understand it, this time further subtracted from work-time. Now, people do not always require a reserve army of unemployed workers to scare them to work. If workers are not simply responding to orders passed down from above (from the CEO and his underlings or from the Party-state's GOSPLAN) but actively participate in decision-making in a democratic way, then they are motivated to work, since they are working for themselves. They become more like white-collar professionals and small businesspeople, who do a lot of their work simply because they love their jobs. Of course, there are other substitutes for the reserve army of the unemployed. Having an authoritarian government can scare people into working, while breaking independent (non-company, non-government) unions and undermining labor rights. (Michal Kalecki wrote about this, back in the 1930s.) Under capitalism, this is often combined with the reserve army. When Milton Friedman's favorites took over Chile, they didn't just impose higher unemployment rates. They also tortured and/or killed a lot of people. The old USSR also was quite authoritarian, from what I've heard and read. Another proposed substitute is "moral incentives": people are encouraged to work hard -- or to make other sacrifices -- for the Motherland, the Fatherland, or the Homeland, as the case may be. This typically works at the beginning of a revolution, at least if the revolution is popular, or some other event that stirs the national soul (as it were). (A lot of people in the US were willing to make sacrifices after 911.) If the people don't control the government -- or other organization that invokes such moral incentives -- the ability to use this technique fades over time. --- Jim Devine / "The only difference between the Democrats and the Republicans is that the Democrats allow the poor to be corrupt, too." -- Oscar Levant
